Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Australia-based Vital Metals (ASX: VML; US-OTCQB: VTMXF) says it is pivoting from completing the rare earths separation plant in Saskatoon to better align with its Norwegian offtake partner while the cost of the processing facility has doubled.
The cost of the Saskatoon plant has been estimated at “over C$20 million” as recently as Vital’s Sept. 20 press release. It now says the amount spent to date totals $18 million, and it expects the cost to complete the entire Saskatoon processing facility at C$37 million, for a revised total cost of about C$55 million for the complete project.
The company announced it will defer completing the facility’s rare earth hydrometallurgical leaching, purification and rare earth precipitation circuits until 2024. It says the deferment will have the benefit of preserving up to C$15.8 million in cash reserves while aligning the timing of the production of rare earth carbonate until Vital’s offtake partner, REEtec, completes its plant in Norway to the second half of 2024.
In the interim, Vital will continue construction to complete the calcine circuit at Saskatoon by the third quarter of 2023, in time to process material from its Nechalacho mine and produce an intermediate rare earth oxide product. Nechalacho is the first rare earth mine in Canada.
Vital intends to sell the product to third parties before starting deliveries of the final rare earth carbonate product to REEtec.
